Key takeaways

• Gasoline prices jumped 41.9% over the past year, while vehicle maintenance and repair costs rose 6.1%.
• Used vehicle prices are down 2% over the past year, creating opportunities for budget-conscious shoppers.
• Savings can come from shifting driving habits and making moves to qualify for insurance discounts.

The cost of driving continues to add up. Americans spent an average of $217.30 on gas and $487.70 on automotive costs in May, according to Empower Personal Dashboard^TM data. Just three months prior, average spending was $170.10 for gas and $468.30 for auto.

Inflation has also introduced a bumpier road: Based on the latest Consumer Price Index, several car-related costs have seen increases over the past year.¹

Having a car means more than just making payments on the vehicle. Smart owners can use market dynamics to help hone in on the best car for their situation, and more options around insurance have arrived on the scene to bring more flexibility. People can also adjust their driving and shopping behavior to make the financial road less rocky.

Car landscape is changing

With a fall in used-vehicle prices since last year, used cars are now seen as a better value, with used electric vehicles expected to see a spike in inventory in 2026. EVs saw a significant bump in leases in 2023 thanks to a now-expired tax credit, and those vehicles’ lease contracts are now ending, with the cars returning to today’s market as used.²

The average transaction price for a new car in April 2026 was $49,461, compared to $26,342 for the average used-car listing. Price-conscious shoppers who may have been willing to buy new are faced with additional changes: Manufacturers are producing fewer inexpensive models, and Americans have been keeping their cars longer — now an average of 12.8 years.^3,4

Read more: The real math behind buying a new or used car

Cars have also become increasingly complex, with electronic sensors and safety features like blind-spot monitoring and emergency braking. Buying a simpler car with less electronics and computerized parts — such as for heated mirrors or a driver’s seat that can memorize multiple positions — may help reduce the risk of costly repairs. Car manufacturing costs have gone up with supply chain disruptions and tariffs, leading some shoppers to opt for simpler trims and entry-level models.⁵

“Test drive” how much car you need

Consider a short-term car rental if you’re unsure whether you can handle the day-to-day expenses of owning a vehicle. Car rentals aren’t just for airport travelers — locations are common in cities and suburban areas. This can provide an opportunity to see how a car would fit into your usual routine before making a longer-term commitment.

Taking time to evaluate how a car would fit into your life is an important part of the car buying process. Researching makes and models is important, but so is understanding ongoing cost:

• Parking situation: Does your property come with free off-street parking, or would you have to pay for a permit or a spot somewhere? In some cities, parking may require renting a spot in a nearby lot or garage.
• Car payments: How much money can you realistically afford to pay for a car? Beyond the initial down payment, there are monthly payments (if financing), along with insurance, fuel, maintenance, registration, and other costs.
• Commuting: Would a car save time and make your work commute more efficient, or would it be used mostly on weekends or for occasional outings?
• Driving destinations: Would you use the car for personal travel and road trips, and would it save money compared to flying? Does the car need to have specific features, such as those for rough terrain or to haul cargo?

Your answers to these scenarios can help you focus on what’s most important and avoid buying more car than you may need. For example, a smaller compact car may be a better fit for crowded city parking, while leasing can be an option if you’re not sure how long you’ll need a vehicle.

Invest in repairs and maintenance

Every car needs maintenance at some point, and vehicle repair costs are climbing. A trip to the auto repair shop can average of $838, which can eat into emergency savings.

For those considering a hybrid car, those can cost around 40% less for repairs and ongoing maintenance compared to gas-powered models.⁶

New tires can also help prevent costly accidents and spin-outs. All-season tires for a medium wheel size — which typically fit SUVs, the most popular car category in the U.S. — run around $100-$250 per tire.^7,8

Program memberships you already have may qualify you for discounts on maintenance and repair visits. Price-club offerings like Costco’s Auto Program or other programs through organizations like AAA or AARP can yield valuable savings. Employers, colleges and universities also could offer price cuts or specific programs.⁹

In addition, some repair shops and businesses offer discounts to members of the military, veterans, and other groups.

Change driving habits to save money

While shopping smart is one option to save, adjusting day-to-day habits can also help people lighten the load on their wallet.

Fuel prices have risen in response to the Iran conflict, and paying at the pump is top of mind for many consumers. Some truck drivers have chosen to drive slower to improve fuel economy, and regular drivers could also see their dollars go further with this tactic.¹⁰

Read more: Pay at the pump: Average gas prices by state

Drivers who don’t need to have a car on-demand all the time could consider splitting a vehicle (and its costs) with a family member, friend, or roommate.

Some companies also reward safe drivers with lower insurance premiums, using programs that have a transmitter in your car to track factors like speed, acceleration, and braking.

Find savings on car insurance

Car insurance is another good opportunity for people to browse options and see if they can find better value with a different policy.

Consider whether to change auto coverage or provider

Each U.S. state sets minimum standards for car insurance policies — with requirements for bodily injury liability per person, per accident, and property damage coverage — and additional factors in some cases.¹¹

If your policy includes coverage limits above the minimum requirements, lowering those limits could reduce your premium. However, you’ll have consider whether the savings would be worth the potential out-of-pocket costs should you need to file a claim and pay a higher deductible.

For those with multiple types of insurance (such as homeowners’ or renters’ insurance), adding an auto policy under the same provider — known as bundling — could be another way to save.

Almost a third of people have switched car insurance companies over the past five years, with the most common reasons being better rates at the new provider and premium bumps at their previous carrier.¹²

Occasional drivers could save with policies known as “pay-per-mile” insurance. Think of these policies as car insurance by the mile, with a device placed in the vehicle to measure usage. Instead of paying a fixed premium alone, drivers typically pay a base rate while the car is parked and a variable rate based on miles driven.¹³

Qualify for discounts

You could also score a price cut based on how you’re paying for your auto insurance. Your provider may offer a discount after setting up electronic payments and/or automatic payments. When getting a quote, also look out for any price difference in whether you pay the full yearly premium upfront (or every six months) rather than monthly.¹⁴

Depending on where you live and other factors, you may be able to take an online course on safe driving or defensive driving in exchange for lower auto premiums — possibly up to 15%.¹⁵

The road ahead

When it comes to paying for a car, many costs like insurance and gas aren’t going away entirely. Staying flexible with your needs and being proactive about finding and asking for ways to save can make a difference in how big the impact is on your overall financial picture.